The wish to reduce the cost of living doubtless had its effect in bringing about free wool, as it had in securing the decision for ultimate free sugar. Woolen clothing is dearer in the United States than in other countries. Cheaper wool will lessen the difference, and will bring somewhat cheaper clothing. The change is not likely to be as considerable or as conspicuous as in the case of sugar. On an average suit of men's clothes the decline in price, due to free wool, will be not far from one dollar. This is not far reaching, but it is something; and every little tells. Perhaps the Democrats cannily reckoned that the retail clothing dealers would serve their party's turn by parading and magnifying the effect of free wool; they are not unlikely to put this forth as the occasion of those extraordinary bargains which the confiding public never discovers to be other than extraordinary.

It

The necessary corollary of free wool is the abolition of the compensating (specific) duties upon woolen goods. They go by the board, as they did in 1894. Only the ad valorem duties upon woolen goods are retained; and these are substantially reduced. will be recalled that the ad valorem duties of 1897 and 1909 had been upon most goods 50 and 55 per cent. In 1894, the duty on woolens had been left, on the more important classes of goods, as high as 50 per cent. On almost all of the woolen fabrics concerning which controversy has been waged the rate now goes down to 35 per cent. Yarns are dutiable at 20 per cent, tops at 15 per cent. The rates on carpets range from 20 to 35 per cent. The 35 per cent rate now established is that of the original compensating act of 1867.

Nominally, the reduction in protection on woolens is in the reduced ad valorem rate only. In fact, however, the abolition of the specific compensating duties means

a further reduction of protection. As is well-known to every one who has given attention to the complexities of schedule K, these compensating duties had given not a little concealed protection. They had been more than enough to accomplish their nominal object, that of simply offsetting the influence of the wool duty in raising the domestic price of wool. This additional concealed protection had not been in the main the consequence, as was so often charged, of deliberate plotting or manipulation. It had been the result of gradual and in some respects unexpected changes in the development of the industry. Whatever the process by which the result had been brought about, the duties on woolen goods, reckoning together both the specific compensating duty and the supposedly protective ad valorem duty, had become extremely high. They had ranged as high as 100 per cent on the few goods that continued to be imported, and were equivalent to 140 or 150 per cent on most foreign goods, which naturally did not continue to be imported in face of these prohibitive rates.

from 100 per cent leading the public to In fact, it is far from

Here is a great decline in rates, or more to 35 per cent or less, expect a marked fall in prices. clear how considerable will be the change in prices. It is quite certain that the change will not be so great as it would be if, -as is so often assumed in popular discussion, every cut in duty necessarily brought a corresponding change in price. The duties on woolens, to repeat, had been in the main prohibitory. Domestic woolens had the field to themselves, and competition among the domestic makers kept the prices of most goods within the range fixed by expenses of production within the country. Those expenses of production were unquestionably made higher because the raw

material, wool, was raised in price by the duty. In what degree the strictly manufacturing expenses also were higher than in foreign countries is extremely difficult to make out. If the 35 per cent duty simply offsets higher manufacturing expenses within the country, the change made in the woolen duties will prove but nominal, substituting an effective protecting duty for a needlessly high and prohibitory one. It would seem that in this case the Democrats strove to apply the competitive principle. The inquiries of the defunct Tariff Board, and some further calculations based upon them, indicated that a duty of 35 per cent would correspond roughly to the difference in expenses of production between American and foreign manufacturers.1 But the correspondence is only a rough one. On some classes of goods the 35 per cent duty is more than enough to enable the domestic manufacturer to hold his own; other classes of goods will be imported to the displacement of the American product. Predictions of wide-spread diasaster from any such change, such as have been freely made for the last few years will not be fulfilled. No doubt in many cases they have been made in good faith, engendered by the extraordinary exaggeration of the necessity of high protective duties. But usually they have been more or less bluff; those who make them have been concerned chiefly with warding off or minimizing unwelcome changes. The probabilities seem to be that under the 35 per cent rate the greater part of the woolen and worsted manufacture will go on much as before. Some weaker mills may go to the wall. It is freely said, even in manufacturing circles, that the proportion of weaker establishments is in this industry not inconsiderable.

1 See the excellent article by Mr. W. S. Culbertson, in the American Economic Review, March, 1913, which summarizes the results of the Tariff Board's investigations and adds some valuable calculations of his own.

Those mills which are well equipped and well managed will probably hold their own. But they will have to adjust themselves to new conditions, and may go through a trying period of transition. The "cutting up trade" (the manufacturers of ready made clothing, who are the largest buyers from the mills) will doubtless experiment with foreign and domestic goods, will buy more or less sparingly until it appears what will be the relative prices of the two, and will compel a sharper rivalry among the manufacturers. Free wool will make possible the utilization of fibers not previously used, and so the production of new classes of goods. Some time must elapse, possibly two or three years, before it is clear what will be the situation of the woolen industry under the new conditions.

In any case it is probable enough that some branches of the domestic woolen manufacture may have to be given up. To a layman, the evidence indicates that the makers of the finest goods and of the cheapest goods are most in danger. The so-called standard medium goods, to which the bulk of the manufacture is given, will probably hold their own. The finest and most expensive grades of men's cloths and women's dress goods seem most likely to be imported in considerably larger volume, and to supplant the domestic goods. Some foreign manufacturers, especially Germans, who have transplanted their establishments to the United States under the temptation of the high rates of 1897 and 1909, will apparently suffer severely.

If the forecast just made is confirmed by the course of events, it will follow that no great change in the price of woolen goods is to be expected. Some reduction will ensue because of the lower price of wool; some further reduction perhaps because of keener competition between domestic and foreign manu

facturers, and sharper conduct of the industry by the former. A more incisive reduction of the duty on woolens, bringing it much below the 35 per cent rate, might indeed lead to far-reaching changes; but nothing of the kind has been done, and is not in prospect for the visible future.

On cotton goods the reductions are not dissimilar in character and in effect from those in the ad valorem rates on woolens. The change on the statute book is great; the figures go down sharply. But in this case also the consequences in trade and industry are much less considerable than in the figures.

The rate on the lowest counts of cotton yarns is but 5 per cent. On the cheapest grade of unprinted and unbleached cotton cloths, it is 7 per cent. For finer grades, the rates rise progressively, the highest on yarns being 25 per cent, and on plain cloths 27 per cent. An additional duty of 2 per cent is imposed in all cases on cloths which are bleached, dyed, printed, or mercerized. The maximum duty on cloths is thus 30 per cent. On ordinary hosiery, the rate is 20 per cent; but on hosiery that is fashioned and shaped comparatively high duties are retained, - 30 per cent if the value is 70 cents per dozen or less, 40 per cent if the value is between 70 cents and $1.20, 50 per cent if the value exceeds $1.20. This is one of the comparatively few cases in which the fence system (abrupt steps in the rate of duty, when goods get beyond a given value point) is retained. Cotton knit goods, in general, are dutiable at 30 per cent, and the dragnet clause (manufactures of cotton not otherwise provided for) has 30 per cent. Cotton gloves, which had been affected by one of the jokers of 1909, are dutiable at 35 per cent.